EU Nations Demand Harder Line on China's Overcapacity

Spain, Italy, the Netherlands, France, and Lithuania are urging the European Commission to adopt a more robust trade strategy against China, citing concerns over the country's industrial overcapacity. The five EU members are calling for accelerated emergency tariff measures and enhanced anti-circumvention tools to address what they describe as systemic and structural overproduction.

This joint appeal precedes a crucial debate within the European Commission on its future China policy, scheduled for May 29. European industries and governments have voiced growing frustration over economic pressure stemming from Chinese competition. The proposed measures aim to provide broader protection for affected industries, allowing for tariffs or quotas when import surges harm domestic sectors, moving beyond product-specific anti-dumping actions.

The proposal also includes a new "resilience tool" to be activated when the EU's supply sources for critical industries become too concentrated. This tool would compel importers to secure suppliers from at least two different countries, mitigating over-reliance. The signatories argue that China's trade practices, combined with U.S. tariffs, have directly impacted European industries, leading to an estimated one million job losses between 2019 and 2025.

Furthermore, the document highlights the overwhelming number of dumping and subsidy complaints burdening Brussels trade officials, the vast majority of which involve China. The proposal advocates for imposing countervailing duties on companies, not just countries or products, a move that could significantly affect Chinese firms operating globally through subsidiaries. Stricter anti-circumvention measures and a trade policy centered on "economic security" are also key demands.